BWX Technologies Announces First Quarter 2017 Results

- EPS Growth of 17% and 22% Over Prior Year Period GAAP and Adjusted
EPS, Respectively- Consolidated Revenue Growth of 17% Over Prior
Year Period- Increases Quarterly Dividend by 22% to $0.11 per Share-Reaffirms
2017 EPS Guidance of $1.85 to $1.95

May 01, 2017 04:30 PM Eastern Daylight Time

LYNCHBURG, Va.--(BUSINESS WIRE)--BWX Technologies, Inc. (NYSE: BWXT) ("BWXT" or the "Company") today
reported first quarter 2017 revenues of $428.2 million, 17% growth
compared to $364.8 million in the first quarter of 2016. Earnings per
share (EPS) for the first quarter of 2017 were $0.55 compared to GAAP
EPS of $0.47 and adjusted (non-GAAP) EPS of $0.45 in the first quarter
of 2016. A reconciliation of non-GAAP results is detailed in Exhibit 1.

"BWXT began the new year with a strong quarter, successfully executing
on our strategy while continuing to deliver on our commitments to both
customers and shareholders," said Mr. John A. Fees, Executive Chairman.
“Our Nuclear Operations business continues to produce excellent results,
generating record first quarter operating income of $73 million. In
addition, we are already seeing a positive effect from the BWXT Nuclear
Energy Canada Inc. acquisition in serving the Canadian commercial
nuclear market. The newly combined Nuclear Power business produced
nearly $78 million in revenues in the first quarter while achieving an
18% operating profit margin. As we continue into 2017, we remain
committed to our overall strategy of maintaining operational excellence
and continuing to position ourselves to further grow the business.”

First Quarter 2017 Results of Operations

The Company’s consolidated GAAP operating income for the first quarter
of 2017 increased to $83.2 million compared to GAAP operating income of
$42.6 million in the first quarter of 2016. Adjusted (non-GAAP)
operating income for the first quarter of 2017 was also $83.2 million,
an increase of more than 14% compared to adjusted (non-GAAP) operating
income of $72.6 million in the first quarter of 2016. The increase in
GAAP operating income compared to the prior year period was largely due
to a $30.0 million charge related to the mPower framework agreement,
which was recorded in the first quarter of 2016. Operating income also
increased due to results from our Nuclear Operations Group (NOG) and
Nuclear Power Group (NPG) segments.

The NOG segment represents our former Nuclear Operations segment. NOG
revenues increased approximately 10% to a first quarter record $325.1
million compared to $295.3 million in the same quarter of 2016 due to
increased activity in component manufacturing as well as our naval
nuclear fuel and downblending operations. NOG operating income was $73.2
million in the first quarter of 2017, almost 13% higher than the $64.9
million in the prior year period.

The NPG segment reporting comprises our legacy Canadian nuclear
operations and the recently acquired BWXT Nuclear Energy Canada Inc.
(BWXT NEC) business. Revenues from NPG more than doubled to $77.7
million in the first quarter of 2017 compared to $36.2 million in the
prior year period, primarily due to the acquisition of BWXT NEC. NPG’s
operating income was $13.8 million in the first quarter of 2017, ahead
of the prior year’s period operating income of $7.0 million, also due to
the net impact of the BWXT NEC acquisition and increased activity of
BWXT Canada.

The Nuclear Services Group (NSG) segment reporting comprises our
previous Technical Services segment and our U.S. nuclear service
business. The latter includes our portfolio of work in advanced reactors
for space and terrestrial power applications. NSG segment revenues were
$27.9 million in the first quarter of 2017 compared to $34.0 million in
the same quarter of 2016 primarily due to the quarterly timing of
maintenance outages in the commercial U.S. nuclear utility market. NSG
segment revenues were also slightly impacted by decline in specialty
engineering work related to new nuclear plant designs, both of which
were partially offset by higher activity at our Naval Reactor
decommissioning/decontamination and NASA support services projects.
NSG’s operating income decreased to $0.7 million in the first quarter of
2017 from $5.8 million in the prior year period due to the
aforementioned quarterly outage timing in 2017, as well as our
transition off of a joint venture project in Idaho in the second quarter
of 2016.

"BWXT accomplished several key strategic initiatives in 2016 and entered
2017 in a position of strength," said Mr. Rex D. Geveden, President and
Chief Executive Officer. "Our Nuclear Operations business continues to
maintain a strong backlog, and BWXT remains a trusted provider for the
Navy as it considers expanding its submarine and aircraft carrier fleet.
Our newly formed Nuclear Power segment is positioned for long-term
growth as it supports ongoing outage work and refurbishment activities
in our traditional Canadian nuclear market and grows into the CANDU
fuel, equipment and services market via the acquisition of BWXT NEC. We
continue to invest in a robust pipeline of opportunities in the Nuclear
Services segment, and we believe we will be able to increase
profitability in that business over the next few years. Lastly, we
remain committed to our balanced capital allocation approach and
continue to evaluate opportunities for acquired growth and strategic
investments."

Liquidity and Debt

The Company utilized cash from operating activities of $54.8 million in
the first quarter of 2017, inclusive of a $30 million settlement payment
to Bechtel pursuant to the Generation mPower LLC Framework Agreement,
compared with net cash utilized from operating activities of $12.8
million in the first quarter of 2016. At the end of the first quarter,
the Company’s cash and short-term investments position, net of
restricted cash, was $108.3 million.

As of March 31, 2017, outstanding balances under our credit facility
included $525.9 million in term loans, $50 million in borrowings under
the revolving line of credit, and letters of credit issued under the
facility totaling $125.1 million. As a result, the Company has $224.9
million of remaining availability under our credit facility, excluding
an additional $250 million accordion provision.

Share Repurchases

We received an additional 846,568 shares in the first quarter of 2017 in
connection with the completion of our previously authorized $200 million
Accelerated Share Repurchase (ASR). We have an additional $193 million
of share repurchase authorization remaining as of March 31, 2017.

Quarterly Dividend

On April 28, 2017, our Board of Directors declared a quarterly cash
dividend of $0.11 per common share. The dividend will be payable on June
6, 2017, to shareholders of record on May 16, 2017.

Outlook

The Company reaffirms its guidance that adjusted earnings per share for
the full year 2017 are expected to be between $1.85 and $1.95. Adjusted
earnings per share exclude any mark-to-market adjustments for pension
and post-retirement benefits recognized during 2017. Beyond 2017, we
continue to anticipate an EPS CAGR in the low double digits over the
next 3-5 years based upon our robust organic growth strategy and
remaining balance sheet capacity. Segment guidance provided for 2017
remains unchanged.

BWXT cautions that this release contains forward-looking statements,
including, without limitation, statements relating to backlog, to the
extent they may be viewed as an indicator of future revenues,
anticipated benefits of the acquisition of GE-Hitachi Nuclear Energy
Canada Inc., management’s plans and expectations for our business
segments, including potential growth opportunities, as well as our
outlook and guidance for 2017. These forward-looking statements are
based on management’s current expectations and involve a number of risks
and uncertainties, including, among other things, our ability to execute
contracts in backlog; the lack of, or adverse changes in, Federal
appropriations to government programs in which we participate; the
demand for and competitiveness of nuclear power; capital priorities of
power generating utilities; adverse changes in the industries in which
we operate and delays, changes or termination of contracts in backlog.
If one or more of these risks or other risks materialize, actual results
may vary materially from those expressed. For a more complete discussion
of these and other risk factors, see BWXT’s filings with the Securities
and Exchange Commission, including our annual report on Form 10-K for
the year ended December 31, 2016 and subsequent quarterly reports on
Form 10-Q. BWXT cautions not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
release, and undertakes no obligation to update or revise any
forward-looking statement, except to the extent required by applicable
law.

About BWXT

Headquartered in Lynchburg, Va., BWX Technologies, Inc. (NYSE:BWXT) is a
leading supplier of nuclear components and fuel to the U.S. government;
provides technical and management services to support the U.S.
government in the operation of complex facilities and environmental
remediation activities; and supplies precision manufactured components,
services and fuel for the commercial nuclear power industry. With
approximately 6,100 employees, BWXT has nine major operating sites in
the U.S. and Canada. In addition, BWXT joint ventures provide management
and operations at a dozen U.S. Department of Energy and two NASA
facilities. Follow us on Twitter @BWXTech and learn more at www.bwxt.com.

EXHIBIT 1

BWX TECHNOLOGIES, INC.

RECONCILIATION OF NON-GAAP OPERATING INCOME AND EARNINGS PER
SHARE(1)(2)(3)

Three Months Ended March 31, 2017

GAAP

PerformanceGuaranteesRelease

mPowerDeconsolidation

FrameworkAgreement

Impairment(Gains) /Charges

Non-GAAP

Operating Income

$

83.2

$

—

$

—

$

—

$

—

$

83.2

Other Income (Expense)

(2.8

)

—

—

—

(0.4

)

(3.2

)

Provision for Income Taxes

(24.6

)

—

—

—

0.0

(24.6

)

Net Income

55.8

—

—

—

(0.4

)

55.4

Net Income Attributable to Noncontrolling Interest

(0.1

)

—

—

—

—

(0.1

)

Net Income Attributable to BWXT

$

55.7

$

—

$

—

$

—

$

(0.4

)

$

55.3

Diluted Shares Outstanding

100.7

100.7

Diluted Earnings per Common Share

$

0.55

$

—

$

—

$

—

$

0.00

$

0.55

Effective Tax Rate

30.6

%

30.7

%

Three Months Ended March 31, 2016

GAAP

PerformanceGuaranteesRelease

mPowerDeconsolidation

FrameworkAgreement

Impairment(Gains) /Charges

Non-GAAP

Operating Income

$

42.6

$

—

$

—

$

30.0

$

—

$

72.6

Other Income (Expense)

22.5

(9.3

)

(13.6

)

—

(0.5

)

(0.8

)

Provision for Income Taxes

(15.4

)

3.4

—

(11.1

)

(0.8

)

(23.9

)

Net Income

49.7

(5.9

)

(13.6

)

18.9

(1.3

)

47.9

Net Income Attributable to Noncontrolling Interest

(0.1

)

—

—

—

—

(0.1

)

Net Income Attributable to BWXT

$

49.6

$

(5.9

)

$

(13.6

)

$

18.9

$

(1.3

)

$

47.8

Diluted Shares Outstanding

105.9

105.9

Diluted Earnings per Common Share

$

0.47

$

(0.06

)

$

(0.13

)

$

0.18

$

(0.01

)

$

0.45

Effective Tax Rate

23.6

%

33.3

%

(1)

May not foot due to rounding.

(2)

BWXT is providing non-GAAP information regarding certain of its
historical results and guidance on future earnings per share to
supplement the results provided in accordance with GAAP and it
should not be considered superior to, or as a substitute for, the
comparable GAAP measures. BWXT believes the non-GAAP measures
provide meaningful insight and transparency into the Company’s
operational performance and provides these measures to investors to
help facilitate comparisons of operating results with prior periods
and to assist them in understanding BWXT's ongoing operations.

(3)

BWXT has not included a reconciliation of provided non-GAAP
guidance to the comparable GAAP measures due to the difficulty and
unreliability of estimating any mark-to-market adjustments for
pension and post-retirement benefits, which are determined at the
end of the year.